Flinn, Harris Talk Schools Funding Prospects

By Bill Dries

For several weeks, it has been an undercurrent feeding the roots of the various branches of the tree that is the Shelby County schools merger.

The thought is that the city of Memphis will come up with some amount of funding for the consolidated school district once the schools consolidation crosses over into the new fiscal year that starts July 1.

At that point, the city is not under any legal obligation to continue any school system funding under state maintenance of effort laws, the scenario goes.

“You never say never on this,” said Memphis City Council member Shea Flinn on the WKNO-TV program “Behind The Headlines.” “It depends on how you define education. If it is just giving money for the school system and board of education to spend, that is probably pretty unlikely in the near term.”

Flinn said the city would be involved in a pre-kindergarten expansion if a half-percent city sales tax hike is approved next month for city voters to decide in the late summer. If voters then approve the sales tax hike, $27 million of the $47 million in estimated revenue it would produce would be dedicated to a city contracted pre-kindergarten operation outside the consolidated school system.

“Education is a bigger system than just the schools and the city will continue to play a role in education,” Flinn said, echoing the sentiments of Memphis Mayor A C Wharton Jr. since last year. “But we are not going to get trapped with voluntary gifts – which we always maintained our contribution was – being hooked into some maintenance of effort, which says it’s not a voluntary gift. It’s required to be paid in this amount in perpetuity.”

County Commission Chairman Mike Ritz estimates there could be only about $5 million in new county funding for the consolidated school district in the fiscal year that starts July 1.

That is based on a 9.9 percent county property tax hike of 40 cents that would produce $64 million in revenue, most of it – $52.8 million – to cover revenue lost in the recent county property reappraisal for tax purposes including the state appeals allowance.

Any county property tax hike of 10 percent or higher requires a nine-vote, two-thirds majority that Ritz says is not there.

One of the variables is the prospect of city funding.

“Memphis city could start paying their debt to the schools,” Ritz wrote in his handout outlining the new math on schools funding this month. “They may be waiting for MCS to disappear 7/1/2013.”

Flinn said the city might begin to pay $57 million in funding the council voted to cut to Memphis City Schools in 2008 if an effort at mediation can do what it hasn’t to date – get started. The $57 million judgment the school system won in the state court case remains in effect even after the merger.

But Flinn says without a mediated settlement, the city doesn’t have to pay as long as the city’s counter claim that the school system owes it more than $140 million for capital spending is still pending.

“We don’t have to pay it until that claim is heard,” Flinn said. “There has always been resistance on the part of the city school board to having any sort of mediation because they just pretend that our claim doesn’t exist when in fact it does.”

Meanwhile, Harris and Flinn offered different opinions about the City Council’s role in the 2-year-old federal lawsuit filed by the Shelby County Board of Education.

Flinn said when county schools leaders filed the lawsuit, they brought the city into the fray.

“The reason we are involved in it is we got sued,” he said. “We didn’t just decide to sue them, they sued us.”

Harris argues that doesn’t mean the city had to remain active in the lawsuit as it moved into Shelby County Commission attempts to contest state laws governing the creation of municipal school districts in the suburbs.

“I am skeptical to say the least that we’ve taken the right approach,” said Harris, who has been on the council for 14 months. “I think we may be the only body politically that’s involved in litigation and sending lawyers to fight this dispute but have never voted on it. … I think we may have chosen the wrong path to draw out this thing unnecessarily.”